Excerpts from CIMB report…

Analyst: Jonathan Ng

Semiconductor Sector update: Strong first half 2010 sales

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• The Semiconductor Industry Association (SIA) released a report yesterday (Aug 2) , indicating a 7.1% sequential quarterly increase in Q2 to US$74.8bn.

• 1H10 sales (US$144.6bn) increased by 50.5% as compared to 1H09 (US$96.1bn).

• This was led by strong demand from a wide range of end markets.

• Sequential growth rates is expected to moderate in the remaining quarters, and yoy growth for the industry is expected to be in line with SIA’s 28.4% estimates.

• We believe companies that might be beneficiaries of the robust semiconductor industry upcycle include upstream players like Stats Chippac; and down stream semiconductor products manufacturers like Avi-Tech (BUY, TP:S$0.30), Serial System (BUY, TP:S$0.12 pending results reivew) and Hisaka (BUY, TP:S$0.35).


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